DISCOUNT FASHION retailer Peacocks yesterday said it expected to meet full-year profit expectations of at least £35m after a good final quarter.

The Cardiff-based group said its core Peacocks business had performed strongly following a re-focusing of ranges towards better quality and more fashionable products.

The division saw like-for-like sales in the 13 weeks to March 27 rise by 5.5% against the same period in the previous year, while like-for-like sales for the year as a whole rose by 5.8%.

Peacocks said it was encouraged by the take-up of new spring lines.

It added that customers were now seeing a greatly improved shopping environment following the modernisation of 34 stores in the final quarter, bringing the total number of refurbished branches in the chain to 151.

It said 52% of its Peacocks stores were now trading in the new format.

The group added that like-for-like sales at its Bon Marche women's and children's clothing chain declined in the final quarter by 13.6% against a strong one-off prior year performance.

But it said discounting of old and redundant stock had helped it fully offset the sales decline with improved gross margins.

Chief executive Richard Kirk said both divisions continued to make good underlying progress. "We are confident that we are well placed to meet market expectations for the year," he said.

Peacocks has 397 Peacocks branches and 314 Bon Marche outlets across the UK.

Earlier this month, it signed an exclusive franchise agreement with MH Alshaya to run Peacocks stores in Turkey and the Arabian Gulf.

Two stores, in Istanbul and Bahrain, have already opened and a branch in Dubai in the United Arab Emirates is due to open this week.

After opening 29 new stores in 2003 and closing one, the Peacocks chain in the UK improved total sales by 12.3% in the final quarter, with an 11% improvement over the year.

Bon Marche, which opened a further eight new stores in the final quarter, saw total sales decline by 3.8% in the 13 weeks to March 27 while total sales over the year moved ahead by 8.2%.

Peacocks said Bon Marche was now benefiting from a dramatically improved terminal stock position and a more flexible supply chain, with significantly reduced lead times and a stronger buying team.

Prior to yesterday's update, analysts were expecting pre-tax profits in the 53 weeks to March 31 of £35.1m, up from £23.1m a year earlier.